Digital Audio Insider -- the economics of music and other digital content

  digital audio insider


Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

My personal website has links to my LinkedIn and Google+ pages and you can send e-mail to david [at] thelayaways [dot] com.

If you enjoy this site, please consider downloading a Layaways track or album from iTunes, Amazon MP3, Bandcamp, or eMusic. CDs are available from CD Baby and Amazon.


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March 29, 2007

Complete That Album and Save the Music Industry
by David Harrell

the Police tour

Well, that was fast -- Apple's "Complete My Album" option is now live in iTunes.

It looks like the standard offer is 99 cents off the full album price for every track you've already purchased, for six months after you buy the first track. (I haven't bought anything from iTunes since last September, but iTunes is showing an expiration date of June 26, 2007 for the eligible albums.)

But there's no real incentive here for albums of 10 tracks or less. For example, I bought "Don't Change" from INXS's "Shabooh Shoobah" a 10-track release. My "Complete My Album," price is $8.91 -- the same amount I'd pay for buying the remaining nine tracks a la carte.

related: Digital Sales: Singles vs. Albums


link 0 comments e-mail listen to the Layaways on Spotify Owes Me Sixty Cents
by David Harrell
When I first wrote about last year, I signed up with the CD trading service, but never got around to trading anything. And I ignored all of the e-mails I received telling me that CDs I owned had been requested.

But when I checked my account last week, I noticed that my own band's two CDs (which I had listed as part of my music collection) had been requested by members.

I sent them off (it doesn't cost anything to send discs, only to receive them) and listed second copies of each, one of which was immediately requested. So I now know that at least three Layaways CDs have been traded within the community.

According to the mailing envelopes supplies:
Full albums for $1 per trade
1.8 million titles available
Artists receive 20% contribution
Though I don't think I'll be seeing that sixty cents any time soon, as the artist-payment system appears to be a work in progress. According to lala's FAQ:
Lala plans on creating a registry where artists can come and identify themselves and claim ownership for each album they've been a part of. We'll ask for certain forms of identification to make sure the individual is who they say they are, and then do a basic check using industry databases. Once registered, artists will receive 20% of the $1 lala fee every time one of their CDs is traded.
I truly don't have a problem with the The site itself is exceptionally well done and it's very cool to list each disc you own and immediately see if someone has requested it. While I haven't traded enough discs yet to receive any in return, the appeal of the whole system is obvious.

And, in theory, the service is just a more efficient way of trading used CDs, which is perfectly legal and generates zero revenue for the musicians involved.

Yet, as I wrote in a follow-up post last year, I can't help wondering if is basically selling digital downloads through the mail, at least to a portion of its members. That is, despite warnings in the user agreement, it's easy enough to rip mp3s from every disc before passing it along in the system. (One member wrote about doing so in a comment to this Online Fandom post.)

Anyway, I'll keep watching for any more CD requests...and for our sixty cents.

related: Is A Digital Retailer? Guest Post and iTunes Pre-Orders Karma Police


link 3 comments e-mail listen to the Layaways on Spotify

March 27, 2007

Not Dead Yet
by David Harrell
Slate's Daniel Gross on the CD format:
Is the CD dying as a commercial product? Sure. But it's got a lot of dying left to do. And in the meantime, there's still money to be made selling discs loaded with the music of Josh Groban, Alban Berg, and Rod Stewart.

link 0 comments e-mail listen to the Layaways on Spotify

March 26, 2007

Digital Sales: Singles vs. Albums
by David Harrell
From today's NY Times -- the death of the album and the rise of the digital single:
Last year, digital singles outsold plastic CD's for the first time. So far this year, sales of digital songs have risen 54 percent, to roughly 189 million units, according to data from Nielsen SoundScan. Digital album sales are rising at a slightly faster pace, but buyers of digital music are purchasing singles over albums by a margin of 19 to 1.
While I don't doubt the trend, throwing around the "19 to 1" ratio for unit sales obscures the fact that digital album sales account for 1/3 of dollars spent, not 1/20th. (That's the figure I remember reading for iTunes sales last year, and if you assume an average of 10 tracks per album, the 19 to 1 ratio roughly translates to 1/3 from albums and 2/3's from singles for actual revenue.)

According to the article, Apple is considering giving credit toward album purchases for iTunes customers who have already purchased a single track from the album:
At the same time, the industry is straining to shore up the album as long as possible, in part by prodding listeners who buy one song to purchase the rest of a collection. Apple, in consultation with several labels, has been planning to offer iTunes users credit for songs they have already purchased if they then choose to buy the associated album in a certain period of time, according to people involved in the negotiations. (Under Apple’s current practice, customers who buy a song and then the related album effectively pay for the song twice).
One other possible solution, which I suggested in this post last year, is a "sliding scale" individual song price, where consumers pay more for the first song they purchase from an album, with lower prices for each additional song they buy.

Thanks, Porter, for the link.

related: The Digital Pricing Conundrum Part III: A New Idea for Variable Pricing


link 0 comments e-mail listen to the Layaways on Spotify

March 24, 2007

The Award for Best Customer Service...
by David Harrell
Goes to the unnamed Rhino rep who set a music fan straight about DRM -- past and present. From the Consumerist piece How I Became a Music Pirate:
So I called Rhino customer support and after an 8 minute wait spoke with a representative. She informed me that the files were indeed copy protected so that I could only play them on specific music players, most notably not iTunes.

"You don't understand," I said, "These files were not copied or pirated, I actually purchased them."

"Well" she responded, "You didn't actually purchase the files, you really purchased a license to listen to the music, and the license is very specific about how they can be played or listened to."

Now I was baffled. "Records never came with any such restrictions," I said.

She replied, "Well they were supposed to, but we weren't able to enforce those licenses back then, and now we can."

link 1 comments e-mail listen to the Layaways on Spotify

March 23, 2007

Message Board Roundup
by David Harrell
Moolah for lala? members wonder if the trading service is profitable.

Subscribers discuss the Hypebot story about a possible sale of eMusic.

And an old thread that I've been meaning to link to since last year: Big Takeover readers debate the ethics of "illegal" downloads. Some interesting opinions here relating to the downloading of songs already owned on CD and LP and the sale of "promo" discs:
After reading all this MP3 stuff it occurs to me that a probably far worse thing than downloading MP3's is buying second hand promo CDs and LPs, which is something that possibly makes up about a quarter to a third of my record collection. Not only does the artist not get anything for their work when you buy a promo, but if the promo was issued by a major, the artist probably paid for the record himself. This means that not only did the buyer not put money in the artist's pocket, he actually took money out.

link 2 comments e-mail listen to the Layaways on Spotify

March 21, 2007

Don't Stand So Close to Me: Going to See the Police
by David Harrell
OK, it's not exactly news that touring, not record sales, is where the money is for many artists. But here's a stunning (at least to me) real-world example of what people are paying for concerts relative to recorded music:

the Police tour

A friend just nabbed four tickets for the July 5th Police concert at Wrigley Field for himself, his girlfriend, and me and my better half. Total costs after the various surcharges, "convenience" charges, and the $100 premium Police fan club membership he needed to buy the pre-sale tickets? A whopping $544.50.

That works out to a little more than $136 a ticket. For a little perspective, consider the price of buying the ENTIRE Police catalog. The band only recorded five studio albums (Outlandos d'Amour, Reggatta de Blanc, Zenyatta Mondatta, Ghost In The Machine, and Synchronicity) and you can buy remastered versions of all five at for just $41.85 with free shipping. Or opt for the "Message in a Box: The Complete Recordings" collection for $53.99.

Which means you can buy can buy all five albums for yourself AND give copies of each to two friends and still spend less than what we're paying for a single concert ticket. You'll pay slightly more at iTunes -- $45.86 for the five original albums (and the Message in a Box set is only available as individual tracks), but you could still throw in a few Police concert DVDs and spend less the price of a concert ticket.

Granted, it's an apples-to-oranges comparison (live music to recorded music) and I have no idea what portion of our total ticket cost ends up in the coffers of Sting and company. (Though I'd bet the percentage is at least as good as it is for the CDs.) But I'm still a little shocked at the relative prices -- and the fact that I didn't dither over the cost that much. Clearly concertgoers are willing to spend a LOT relative to what they're paying for recorded music. Hope it's a good show...


link 0 comments e-mail listen to the Layaways on Spotify

Today's Wall Street Journal
by David Harrell
A front page story by Ethan Smith on the decline of music sales:
The music industry has been banking on the rise of digital music to compensate for inevitable drops in sales of CDs. Apple's 2003 launch of its iTunes Store was greeted as a new day in music retailing, one that would allow fans to conveniently and quickly snap up large amounts of music from limitless virtual shelves.

It hasn't worked out that way -- at least so far. Digital sales of individual songs this year have risen 54% from a year earlier to 173.4 million, according to Nielsen SoundScan. But that's nowhere near enough to offset the 20% decline from a year ago in CD sales to 81.5 million units. Overall, sales of all music -- digital and physical -- are down 10% this year. And even including sales of ringtones, subscription services and other "ancillary" goods, sales are still down 9%, according to one estimate; some recording executives have privately questioned that figure, which was included in a recent report by Pali Research.
And Walter Mossberg and Katherine Boehret give Apple TV a very postive review:
In our tests, Apple TV is a pleasure to use. Setup was stunningly simple. We just plugged the unit in and hooked it up to the TV with a single cable (not included). The unit found and connected with Walt's Wi-Fi network almost instantly. To link to each computer, we just typed into iTunes on that computer a five-digit code number the Apple TV put up on the TV screen. This needs to be done only once.

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March 20, 2007

by David Harrell
Snocap, which enables bands/labels to sell tracks directly from MySpace (and other websites), has a received a ton of attention over the past few months, but there's a competing service, one that I hadn't heard about it before I received a note from a reader (Ben) a couple of weeks back.

Echospin has already picked up some business from some well-known artists -- Morrissey, Iron Maiden, and Widespread Panic, and indie labels such as Polyvinyl and Drive-Thru Records.

From the end-user standpoint, Ben likes it:
As a consumer, I was pretty damn impressed with the system. It installed flawlessly in Firefox (only tried under Window). I downloaded the album at 600kps and it came with an m3u and 500x500 album art. I didn't bother burning it or sending it to my portable [hell, I have the mp3s, I can do it later]. For the album I bought (hellogoodbye's zombies aliens vampires dinosaurs), the tracks were high quality VBR mp3s. I payed 9 bucks and couldn't be happier.
He also asked if I thought the fees ($50 setup per album and $2 per transaction) made sense for indie artists and labels.

I think they do -- Snocap charges bands $30 a year and indie labels pay $100 a year, though those fees are waved for the first year. And there's a per-download charge of 39 cents a track (that's for bands, the per-download charge for labels isn't listed on Snocap's FAQ page.)

Selling a 10-track album for $9.99 in Myspace via Snocap would net a band $6.00, while the same transaction via Echospin would leave the band with $7.99.

The biggest difference, of course, is that Echospin appears to be built around the idea of full-album downloads, not individual tracks. There is an option for selling a single or EP, but the $1 transaction fee effectively kills the idea of a 99-cent single-song download.

There's also the credit card issue -- while Snocap touts the fact that it allows PayPal transactions, I just tried to buy an album via Echospin and you have to use a credit card.

related: Snocap, CD Baby, and Myspace


link 1 comments e-mail listen to the Layaways on Spotify

March 15, 2007

An Online Music Store for NPR
by David Harrell
Last year, Hypebot noted that National Public Radio was making plans for an online music store, as outlined in this NPR "Blueprint for Growth" document:
NPR will lead an exploration to develop a multi-genre, digital music service that will build distributed value for NPR, producers and stations and reinforce public radio’s role in defining and presenting music. The new service will make it easy for the audience to find, audition, explore, share, store and purchase music in all its forms. This plan will be collaboratively designed with key partners during the second half of 2006 and executed in early 2007.
It doesn't look like anything's going to launch in early 2007, but I just noticed this job listing on
The Director, NPR Music creates and executes the strategy to launch NPR Music as a premiere online music discovery destination; builds on the principle of aggregating valuable music-related assets not only from NPR but also selected NPR stations around the United States and other trusted sources; plans and launches products for online and on-demand delivery; leads a team in developing, delivering, and constantly improving a music discovery service that is relevant in the lives of NPR listeners and new audiences.

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March 14, 2007

Wednesday Odds and Ends
by David Harrell
Jane Galt asks: How Much Music Is Enough?

What Your Music Says About You:
There you have it, then. Social psychologists (two of them, at least) have jumped head first into the waters of music research, learning that our music says a lot about who we are, and that we can make pretty accurate judgments about what people are like based solely on the music they like.
Michael Hirschorn thinks social networking sites may have jumped the shark.

Bob Lefsetz lists the reasons CD sales are tanking.

Finally, a quick plug for my pal Dave Derby, who has a new disc out on Reveal Records titled "Dave Derby and the Norfolk Downs." The CD version isn't available yet in the U.S., but you can pick up it up in iTunes, of course, or stream some tracks from Dave's site. ("Olivine" is my favorite.) He also posted an mp3 of this beautiful cover of "Make a Deal with the City" by East River Pipe.


link 1 comments e-mail listen to the Layaways on Spotify

March 12, 2007

Even More Content
by David Harrell
One theme I keep coming back to with this blog is the idea that the amount of available entertainment content (audio and video) appears to be growing faster than the quantity of hours that can be devoted to listening to or viewing it.

Perhaps the iPod, media-equipped phones, and other portable devices are creating more listening hours for some music fans, but a new release isn't just competing with other new releases. Every single piece of new music that becomes available in iTunes is part of an ever-expanding universe of listening choices. Not just music released in the past, but music from the past that is just now becoming available.

If -- as Paul Lamere calls it -- the " Celestial Jukebox" becomes a reality, what are the implications for individual artists and producers? While it's often overlooked or misunderstood, one key part of Chris Anderson's Long Tail theory is that aggregators and retailers can profit by providing more and more niche content. But there's simply no promise that the niche producer will profit as well.

At the level of the individual artist, it seems likely that expanded content mostly benefits established artists who already have substantial audiences. From today's NT Times -- a piece on archives of live radio and television music:
"These are niche products and they're not for the casual fan," said Danny Goldberg, president of the artist management company Gold Village Entertainment. But Internet marketing and online stores have made it easier and less expensive to reach fans, and Mr. Goldberg said that he was considering buying a catalog of live recordings, even though he might acquire the rights to release only a fraction of them.

At a time when music sales are declining, many expressed frustration that it was so complicated to find a way to make money on these kinds of recordings. In an odd twist, material by older artists is especially desirable, since their adult fans tend to buy music rather than download it illegally.

"At some point it becomes irrational not to figure out a way to exploit this stuff if the parties involved will benefit," said Greg Scholl, president and chief executive of the Orchard, a digital distribution company. "There's no question this stuff is more saleable than it was."

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March 09, 2007

Apple's Music Marketing Muscle
by David Harrell
Today's Wall Street Journal has a long piece on the marketing muscle of the iTunes store, which includes a sour note from Lily Allen:
Yet Ms. Allen, the young British singer behind the hit "Smile," complained during the recent radio interview about Apple's tactics. "They won't advertise your album unless you give them extra material," Ms. Allen said. She said iTunes pushed her to quickly turn out a version of a song, so she planned to give them a "rubbish remix." Ms. Allen said she would offer a better version free on her MySpace page. Apple declined to comment on Ms. Allen's remarks, and a spokeswoman for her label, EMI Group's Capitol Records, said the singer and her manager weren't available to elaborate.
I'm curious about this stat from the article:
Apple isn't under as much pressure to squeeze profits from iTunes because of the money it makes on iPods. In fact, it earns little from iTunes after paying fees for the music and credit-card processing. ITunes typically pays major labels about 72 cents a track, while it pays most independent labels around 62 cents.
Some iTunes sales from January just showed in our CD Baby account -- we're receiving 63.7 cents per individual track AFTER CD Baby takes its 9% cut. I can only guess that CD Baby was able to negotiate the "major label" rate for the self-released music it distributes.

But why the second-tier payout for indie labels that deal directly with Apple? Are the associated costs higher for selling lower-volume digital downloads?


link 3 comments e-mail listen to the Layaways on Spotify

March 08, 2007

A Pricing Comparison: iTunes vs., Part I
by David Harrell
As mentioned in some previous posts, I've been working on an album pricing comparison project for iTunes versus While I'm planning to put together an in-depth research report, I thought I'd share some of the numbers while they're still relatively fresh.

For four successive Fridays (January 19th to February 9th), I tracked the prices of the top 25 albums in the iTunes store and compared them with prices for the physical CDs.

A total of 52 albums appeared in the top 25 during the four sampling periods, though it's certainly possible that more albums appeared in the top 25 during that time -- I was only checking once each week. Nine of those albums were either unavailable from or were iTunes exclusives such as live releases from the Decemberists and Keane.

That left 43 albums where relatively direct pricing comparisons were possible. However, many of these albums appeared in the top 25 for multiple weeks and the prices weren't always the same. While the iTunes price changed for just one album, prices were less stable over at, where six albums showed different prices on different dates.

Comparisons are also complicated by the fact that -- in some cases -- the downloadable version features bonus tracks. I'll give more details in a future post.

But here's a quick overview:
Total albums in the top 25 at iTunes: 52

Also available from 43

Same price for both stores: 18/43 or 42%

Lower price for iTunes version: 15/43 or 35%

Higher price for iTunes version: 8/43 or 19%

And two exceptions: One album was priced the same in both stores for one week, but higher in Amazon in a subsequent week. Another was cheaper in iTunes before a Amazon price reduction undercut the iTunes price.
On average, the single album price for iTunes was $10.20 versus $10.86 for the same albums at (To create those numbers, I treated two double-disc sets as separate single albums and used the mean price for albums with pricing changes.)

Shipping charges for purchases are, of course, another factor to consider. Though, based on my informal survey, it seems like many customers are avoiding them.

Check back soon for more analysis and details.

related: Amazon Shipping Survey Results, The Convergence of Download and CD Prices?


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March 07, 2007

Tapping the Police
by David Harrell
More than 20 years ago, "This Is Spinal Tap" so perfectly nailed every rock band cliché that it's pretty much impossible to read ANYTHING about a band and not think "that sounds just like Spinal Tap."

This recent Time Online piece on the re-formed Police, for example, is full of Spinal Tap moments. My favorite is this bit from Sting, where he sounds like he's channeling Nigel Tufnel:
"I'd just done this lute album that was more successful than I could have ever imagined. I could do another but that would be painting myself into a corner."
related: Friday Fun: Message In A Bottle


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March 06, 2007

Disc Makers and DigStation: An Online Download Store from a CD Manufacturer?
by David Harrell
So I'm thumbing through the latest catalog from Disc Makers and I find a full-page ad for, an online music store that sells unprotected single-song mp3s for 99 cents and albums for $9.99. The store also offers PDF versions of the full album artwork as well, free with a full-album download or 99 cents for standalone purchases.

The site still has a "beta" tag and the only way to get into DigStation is to have a CD manufactured by one of DigStation's replication partners. Currently, there are just two -- Disc Makers and Oasis. But according to the site's artist FAQ, "once we streamline the backend processes, we will roll this service out to independent musicians everywhere."

While it seems like online music distribution is at odds with CD manufacturing, the CD isn't going away any time soon, and digital distribution seems to a value-added item for CD manufacturing packages. Disc Makers and Oasis both offer clients digital distribution via CD Baby, so I was puzzled about the whole DigStation angle.

There's no specific info about who is behind DigStation on its website, but I was able to find a Pennsauken, NJ mailing address on the Terms and Conditions page. Of course, it's the exact same address as Disc Makers' NJ location. Is Disc Makers looking toward a future without the disc?


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March 02, 2007

College Radio and eMusic
by David Harrell
An eMusic subscriber found that 26 of the top 40 albums on Dusted Magazine's current college radio chart are available from eMusic:
Week of Feb 27th 2007

1 Deerhoof-- Friend Opportunity
2 Of Montreal-- Hissing Fauna, Are You the Destroyer?
3 The Apples in Stereo-- New Magnetic Wonder
4 The Shins-- Wincing the Night Away
5 Deerhunter-- Cryptograms
6 Ghost-- In Stormy Nights
7 Peter Bjorn and John-- Writer's Block
8 Explosions In The Sky-- All of a Sudden I Miss Everyone
9 Menomena-- Friend and Foe
10 Clap Your Hands Say Yeah-- Some Loud Thunder
11 Beirut-- Lon Gisland
12 Marnie Stern-- In Advance of the Broken Arm
13 Camera Obscura-- If Looks Could Kill
14 Andrew Bird-- Armchair Apochrypha
15 Fujiya & Miyagi-- Transparent Things
16 Loney, Dear-- Loney Noir
17 BARR-- Summary
18 MV & EE with the Bummmer Road-- Green Blues
19 The Six Parts Seven-- Casually Smashed to Pieces
20 Dr. Dog-- We All Belong
21 Do Make Say Think-- You, You're History in Rust
22 The High Llamas-- Can Cladders
23 Lavender Diamond-- The Cavalry of Light
24 Dead Meadow-- Dead Meadow
25 Bloc Party-- A Weekend in the City
26 Clinic-- Visitations
27 P.G. Six-- Slightly Sorry
28 The Broken West-- I Can't Go On, I'll Go On
29 Love of Diagrams-- Love of Diagrams
30 Eluvium-- Copia
31 Busdriver-- RoadKillOvercoat
32 Julie Doiron-- Woke Myself Up
33 Antibalas-- Security
34 David Vandervelde-- The Moonstation House Band
35 Los Breastfeeders-- Les Matins de Grande Soirs
36 Aqueduct-- Or Give Me Death
37 Hella-- There's No 666 in Outer Space
38 Arboretum-- Rites of Uncovering
39 The Earlies-- The Enemy Chorus
40 Psychic Ills-- Early Violence

Somewhat surprisingly, famed DIY band Clap Your Hands Say Yeah ISN'T found on eMusic, though one comment to the post notes that the new album is available for European subscribers.


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Digital Music Store Comparison
by David Harrell
TuneTuzer is a nifty new site that features detailed comparisons of digital music stores and subscription services for the US and the UK.


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    Out Now -- "Maybe Next Year" -- The New Holiday Album:

    <a href="">Joy To The World by The Layaways</a>

    "This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium

    "Perfect listening to accompany whatever holiday preparations you may be making today." -- Bag of Songs

    O Christmas Tree - free mp3 lyrics and song details
    Away In A Manger - free mp3

    Download from eMusic, iTunes, Amazon MP3, or Bandcamp. Listen to free streams at

    album cover art from The Space Between

    <a href="">Keep It To Yourself by The Layaways</a>

    "...about as melodic and hooky as indie pop can get." -- Absolute Powerpop

    "Their laid-back, '60s era sounds are absolutely delightening." -- 3hive

    "...melodic, garage-influenced shoegaze." -- RCRD LBL

    Where The Conversation Ends - free mp3
    January - free mp3
    Keep It To Yourself - free mp3

    Download from eMusic, iTunes, Amazon MP3, or CD Baby, stream it at or Napster.

    album cover art from We've Been Lost

    <a href="">Silence by The Layaways</a>

    "The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music

    "Catchy Guided by Voices-like rockers who lay it on sweetly and sincerely, just like Lionel Richie." -- WRUV Radio

    Silence - free mp3 lyrics and song details
    The Long Night - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at, Napster, or Rhapsody.

    album cover art from More Than Happy

    "These are songs that you want to take home with you, curl up with, hold them close -- and pray that they are still with you when you wake up." -- The Big Takeover

    Let Me In - free mp3
    Ocean Blue - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at, Napster, or Rhapsody.

    More Layaways downloads:

    download the Layaways at eMusic download the Layaways at iTunes

    the layaways website